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Old 09-15-2009, 01:21 PM
 
2,011 posts, read 3,299,779 times
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Quote:
Originally Posted by Ultrarunner View Post
The problem was the CA legislature failed to act in the 70's and in effect was more than happy to turn it over to the voters... I think no one predicted the vast support Prop 13 received... almost EVERY elected official and many, many other groups came out against it... the legislature even came in late with their own version once Prop 13 picked up favor with the Voters...

The reason I say the Voter's got it right is because I believe the Voters intuitively knew spending was spiraling out of control and they sought to defund it... much like what happens in Washington...

I'm one of those that bought at the peak of the market and pay many times that of my neighbors and after careful consideration... I choose to buy with the rationalization that those before me paid to make the neighborhood what it is today and that someday... I will be in their place paying less.

Where is it given that the citizens of CA don't already pay enough? So many temporary taxes never go away and I believe getting rid of Prop 13 will only serve to increase taxes in short order...

Home Ownership is one of the things that makes this country great... having to worry what arbitrary value assigned by the Assessor each year as to whether you will be able to keep your home is not the land I envision...

Prop 13 eliminated much of the graft and corruption that was all too common place in California's Property Tax Structure...

Prop 13 is not one sided... it's not a all-or-nothing proposition... The voters can and often choose to increase taxes above Prop 13 limits in my city of Oakland... seems we have a stellar record in passing these increases... everything from midnight basketball to street lighting and fire prevention and new sports stadiums, etc... and yes, I have even voted yes several times when I could see a real benefit... like the Mosquito Abatement District.

I don't know why more don't avail themselves of Prop 58 passed in 1986 and 193 passed by the voters in 1996 regarding parent/child transfers... could be because I live in Oakland and almost no-one that I grew-up with has stayed in Oakland...

I've been to too many funerals of parents from my High School friends and the first thing that happens is the Real Estate is sold... I've even mentioned the tax benefits of keeping it in the family and the reply is no one in the family wants to live in Mom or Dad's old house... might be different in other areas.

The son of the couple I bought my home from was asked if he wanted the place when the decision was made to move after nearly 50 years... he told his parents to sell it because he'd never be moving back to California.. he was quite happy with the life he made in Florida... hey, they could have adopted me and I would be saving $7500 a year in Property Taxes
Ultrarunner, thank you for your post; I appreciate the insight that you offer on this issue. Yes, perhaps certain areas are more desirable to stay in than others; that is definitely true.

As far as FL, while I certainly don't want to disrespect any state because every state and area has it's positives as well as negatives, I can say honestly from my heart, that even though FL might be less expensive to live in than CA (or another state perhaps), you get what you pay for. We were there the first week of July (Tampa area) and while the gulf was beautiful, the heat and humidity were downright stifling. For me, life is too short to live like that. P.S. - I live in NE OH, and I can take our winters which I've grown to despise as I've gotten older over the stifling heat and humidity that I felt there. There are more things that struck me negatively, but as I said, I don't want to disrespect any person who lives in FL and likes it there by complaining (especially as a visitor). To each his or her own.
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Old 09-15-2009, 01:49 PM
 
Location: Southern California
793 posts, read 628,102 times
Reputation: 1153
Quote:
Originally Posted by Donna7 View Post
You always had well-thought through posts, however, I have to say that if Prop 13 is one of the things the voters got right, then why is everything so wrong in CA (after Prop 13 got passed)? I don't understand why there are only two choices in CA as far as property taxes go: (1) Proposition 13 or (2) doubling of property taxes every year. This doesn't make sense to me. Why not a happy medium?

I'm not a financial genius, but it seems to me that if the revenue is not coming in fast enough through property taxes, then other taxes will be raised to make up for the shortfall. Like someone else has already said, the newcomers and new buyers pay high property tax if the house is expensive to start out with along with high income and sales tax. So what's the attraction of being taken advantage of? Sorry, but I feel that newcomers and new buyers are being ripped off big-time by the Old Boys Network in CA. This is not to say that CA old-timers are not in the area of income and sales tax, but this Proposition 13, CA's sacred cow, needs to be put out to pasture.

P.S. - I'm willing to bet that the same people complaining about socialism and "government take-over and intrusion into people's lives" as it pertains to a proposed public health care option do not mind being subsidized by the rest of the people who pay much higher property taxes. I've found that what's good for the goose is not always good for the gander. The Prop 13 old-timers use the same roads, the same libraries, the same fire and police services, yet pay a fraction of the cost. Someone is paying for it and it's the people who pay a disproportionate share of their taxes. Also, I'm not convinced that in today's economic environment that grown children are not benefitting from their parent's Prop. 13 benefits through inheritance, transfer, etc; they'd be fools not to.
Very good post. I am not sure why it has to be one or the other either. It's funny how no homeowner wants their property taxes to go up, but the same homeowners are comfortable with sky rocketing home values. Only in California. I too have noticed that it was after Prop. 13 that our state's finances got out of control. It was also after Prop. 13 that our home values went insane. I know it does not necessarily mean the one causes the others. However, we would be foolish to ignore the possible relationship.

Maybe more realistic property taxes (higher) would force buyers to stop agreeing to insane purchase prices.
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Old 09-15-2009, 03:27 PM
 
14,199 posts, read 26,341,715 times
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Quote:
Originally Posted by CaliDude1 View Post
Very good post. I am not sure why it has to be one or the other either. It's funny how no homeowner wants their property taxes to go up, but the same homeowners are comfortable with sky rocketing home values. Only in California. I too have noticed that it was after Prop. 13 that our state's finances got out of control. It was also after Prop. 13 that our home values went insane. I know it does not necessarily mean the one causes the others. However, we would be foolish to ignore the possible relationship.

Maybe more realistic property taxes (higher) would force buyers to stop agreeing to insane purchase prices.
Any proposal to change Prop 13's from a time of transfer assessment system would face difficult political realities.

Splitting the tax roll was tried in 1992 and failed in the polls.

Predictability in Taxes is one of the few pluses cited for businesses in our State... and the last thing CA needs is another incentive for business to leave.

Proposition 13 uses real numbers, the value at time of transfer plus limits increases to 2% per year... when was the last time you got 2% interest on your savings account?

Going to a market-value system dependant on the assessor's opinion of value substitutes real numbers for a best guess approach to what your home is worth at any given time.

CA previously assessed Property Tax based on market value and the method was abused... and as I mentioned in a previous post... several Assessors did jail time because the temptation and ability to grant favors of low assessments to those of influence.

Government revenues are affected by economic conditions. In the 1990's California experienced a severe recession with lowered both sales and income tax revenue. Property values fell 30% Statewide while at the same time Property Tax Revenue increased... this would not have been the case without Prop 13... so even in bad times Property Tax Revenue continued to increase.

Prop 13 has also withstood numerous legal challenges all the way to the United States Supreme Court with Nordlinger v. Hahn where the court decided 8-1 that Prop 13 doesn't violate the Constitutions Equal Protection Clause when it said,

"The state legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high."

I value this forum because it encourages public discussion on issues that affect all of us...
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Old 09-15-2009, 04:30 PM
 
Location: Southern California
793 posts, read 628,102 times
Reputation: 1153
Quote:
Originally Posted by Ultrarunner View Post
Any proposal to change Prop 13's from a time of transfer assessment system would face difficult political realities.

Splitting the tax roll was tried in 1992 and failed in the polls.

Predictability in Taxes is one of the few pluses cited for businesses in our State... and the last thing CA needs is another incentive for business to leave.

Proposition 13 uses real numbers, the value at time of transfer plus limits increases to 2% per year... when was the last time you got 2% interest on your savings account?

Going to a market-value system dependant on the assessor's opinion of value substitutes real numbers for a best guess approach to what your home is worth at any given time.

CA previously assessed Property Tax based on market value and the method was abused... and as I mentioned in a previous post... several Assessors did jail time because the temptation and ability to grant favors of low assessments to those of influence.

Government revenues are affected by economic conditions. In the 1990's California experienced a severe recession with lowered both sales and income tax revenue. Property values fell 30% Statewide while at the same time Property Tax Revenue increased... this would not have been the case without Prop 13... so even in bad times Property Tax Revenue continued to increase.

Prop 13 has also withstood numerous legal challenges all the way to the United States Supreme Court with Nordlinger v. Hahn where the court decided 8-1 that Prop 13 doesn't violate the Constitutions Equal Protection Clause when it said,

"The state legitimately can conclude that a new owner, at the point of purchasing his property, does not have the same reliance interest warranting protection against higher taxes as does an existing owner who is already saddled with his purchase and does not have the option of deciding not to buy his home if taxes become prohibitively high."

I value this forum because it encourages public discussion on issues that affect all of us...
Ultrarunner,

Thank you for an informative response. I am no financial wizard. But considering the fact that property taxes go to pay for services shouldn't the annual increases at least match the rate of inflation? If the cost of educating children, paying fire fighters and police officers increases equal to or greater than the rate of inflation then it only makes sense. Property values go up and down. However, the general trend in California is up over time. So tax bills may not need to be pegged directly to home values, but the differences between the two should not be as pronounced as they are now for many homeowners.

Can't some kind of hybrid assessment work? I don't think elderly people who paid their homes off and are on fixed incomes should be taxed out of their homes. At the same time it is advantageous for the state of California for young families to be able to afford homes near employment centers. If not, they will leave. And that is not good. There is definitely a relationship between affordability and tax burden. Lastly, if things get bad enough for the state I don't believe any policy will be untouchable, not even Prop. 13.
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Old 09-15-2009, 04:46 PM
 
14,199 posts, read 26,341,715 times
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Quote:
Originally Posted by CaliDude1 View Post
Ultrarunner,

Thank you for an informative response. I am no financial wizard. But considering the fact that property taxes go to pay for services shouldn't the annual increases at least match the rate of inflation? If the cost of educating children, paying fire fighters and police officers increases equal to or greater than the rate of inflation then it only makes sense. Property values go up and down. However, the general trend in California is up over time. So tax bills may not need to be pegged directly to home values, but the differences between the two should not be as pronounced as they are now for many homeowners.

Can't some kind of hybrid assessment work? I don't think elderly people who paid their homes off and are on fixed incomes should be taxed out of their homes. At the same time it is advantageous for the state of California for young families to be able to afford homes near employment centers. If not, they will leave. And that is not good. There is definitely a relationship between affordability and tax burden. Lastly, if things get bad enough for the state I don't believe any policy will be untouchable, not even Prop. 13.
Good points...

It just may be that I a bit of a skeptic...

One school believes taxes will be lower or at least the tax rate will go down if Prop 13 limits ceased... others, like me, believe we would see no real reductions and instead a round of increases as long term home-owners had their property assessments increase to market.

The original alternative to Prop 13 was to index the Home Owner Exemption to the rate of inflation... many, outside of politics, thought it reasonable and those in Sacramento said it would cause financial disruptions... in the end, it did not happen.

Another argument is Prop 13 is self-regulating because property is re-assessed to market on change of ownership and typically that has occurred every 5 to 7 years in California... Granted, this may not be the case going into the future...

Reassessment upon transfer and the ability to approve higher taxes are built-in safety mechanism to address inflation and increased property values...
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Old 05-27-2010, 03:58 PM
 
783 posts, read 433,034 times
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Proposition 13 has made California much more centrelized in terms of administration and funding becouse the local governments are unable to collect enoguh of local proprety tax revenues to fund them self.
Instead local funding has more and more become an issue for the state government and lesser and lesser degree a local isue local goverenmennts are facing huge shortfalls in proprty tax revenues leaving them in the hand of state government for funding and for being able to run them self.
But the same situation also goes in reverse since local goverenments are severly restricted when it come to be able to collect proporty tax revenues they are also to a much less degree able to redsitrbute parts those revenues to state goverenment thus reducing state proporty tax revenues wich in turn leads to an ever growing state budge defecit.
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Old 05-29-2010, 10:06 AM
 
783 posts, read 433,034 times
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Quote:
Originally Posted by EastCoastRefugee2 View Post
A very bright and informed man's opinion.

Mervin Filed Questions California

I read the above with great interest. I recently saw a television program on PBS that dealt with the education system in CA., and it was an eye opener on how Prop. 13 helpd CA. get to where it is today.

The Merrow Report- First to Worst (Special Challenge of Prop 13) (http://www.pbs.org/merrow/tv/ftw/prop13.html - broken link)
The real problem with Propostion 13 is the two thirds majority that is requierd for raising taxes while no two thirds majority is requiered for cuting taxes this leads to great imbalances in Californias budget between spending tax cuts and revenue collection.
The only way to rebalance Californias budget under propstion 13 is to also require a two thirds majority to cut taxes.
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Old 05-30-2010, 12:21 AM
 
14,199 posts, read 26,341,715 times
Reputation: 8357
Quote:
Originally Posted by Ultralight View Post
Proposition 13 has made California much more centrelized in terms of administration and funding becouse the local governments are unable to collect enoguh of local proprety tax revenues to fund them self.
Instead local funding has more and more become an issue for the state government and lesser and lesser degree a local isue local goverenmennts are facing huge shortfalls in proprty tax revenues leaving them in the hand of state government for funding and for being able to run them self.
But the same situation also goes in reverse since local goverenments are severly restricted when it come to be able to collect proporty tax revenues they are also to a much less degree able to redsitrbute parts those revenues to state goverenment thus reducing state proporty tax revenues wich in turn leads to an ever growing state budge defecit.
Must be different in your part of California... I live in Oakland and the voters have a long history of voting for taxes in excess of Prop 13 1% baseline.

Schools, Parks, Sports Stadiums, Police, Fire Suppression... just to name a few.

My tax rate is closer to 1.5%... nearly 50% above Prop 13's 1%

In addition, Sales Tax rate continues to increase... and Income Tax.

I'm thankful everyday for Prop 13 and the voters that had the foresight to make it law... Prop 13 provides a steady revenue stream and gives property owners a little predictability...

Just think how many more families would have been forced to sell when property prices spiked had we not had Prop 13?
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Old 05-30-2010, 03:58 AM
 
783 posts, read 433,034 times
Reputation: 238
Local sales taxes do rise as proporty tax revenues shrink thanks to proposition 13 and this is made trough voting.
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Old 05-30-2010, 04:23 AM
 
783 posts, read 433,034 times
Reputation: 238
Quote:
Originally Posted by Ultrarunner View Post
Must be different in your part of California... I live in Oakland and the voters have a long history of voting for taxes in excess of Prop 13 1% baseline.

Schools, Parks, Sports Stadiums, Police, Fire Suppression... just to name a few.

My tax rate is closer to 1.5%... nearly 50% above Prop 13's 1%

In addition, Sales Tax rate continues to increase... and Income Tax.

I'm thankful everyday for Prop 13 and the voters that had the foresight to make it law... Prop 13 provides a steady revenue stream and gives property owners a little predictability...

Just think how many more families would have been forced to sell when property prices spiked had we not had Prop 13?
Proposition 13
leads to higher overall taxation becouse of revenue shortfalls both on local and on state level togehther with an deteriorating business and investment enviroment wich leads to even more revenue shortfalls.
If taxation was shifted away from peoples income to higher and thus lesser regressive proporty taxation people would have more than enough left on their income to have afford to stay in their houses.
The problem with propsstion 13 is not nescerly low taxation or low revenue collection but what it incentivies namely higher overall taxation
and lesser overall affordability in housing.
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